Page 415 - THE MARKET WHISPERER

THE MARKET WHISPERER 41 1

3. Rising Stop Order
After selling three-quartersof the stock, you need to raise the stop order
for the last quarter to the entry price. Since our law states “never return
your money to the market,” you want to be sure that the profits of that
three-quarter quantity stayin your pocket. If the last quarter returns to
the entry point, you’ve lost profit only on that quarter. But if you let the
remaining quarter drop to below the entry point, then you’ll be doling
out money that you’ve earned to cover the loss, and that of course is
against our rules!

4. Second Target
Lock in the remaining quarter at 6%, or manage it according to methods
we have already learned. For example: raise the stop a little below the
previous day’s low each day that you remain in the trade.

Q&A
• What should you do if you have bought stock, but it is moving

sideways and deciding to go nowhere over several days?
Sell it! Remember, when you bought it, you thought differently: that it
would shoot up to your target. It didn’t. What does that mean? Simple:
you have made a bad choice. Admit it quickly, and sell. If the price has not
chosen your direction, you are in a gambler’s territory. Remember the rule:
if the price does not reach its profit target by the end of the second week of
trading from its purchase, sell three-quarters of the quantity, regardless of
whether you have made a profit or loss. Continue managing the remaining
quarter according to swing principles.

• What should you do if the price approaches the target towards the end
of the trading day?
Give it some thought. Let us say the price has already reached 2.5%,

but it is also clear to you that it will not reach the 3% target by the end of
the day. Sell three-quarters before trading closes and reduce your risks of
what the next day might bring.

• Price gaps
When you are about to buy a stock for a swing at the start of the trading

day and a gap shows of up to 1% above the trigger, you can still buy the
stock. In this case, calculate your profit or loss point according to the